From Russia with love, service firms look to new markets
'It's the third-largest pressure pumping market in the world,' Trican boss says
As horizontal drilling and hydraulic fracturing free up gobs of oil and gas annually in North America, this technological revolution has caught the attention of other nations with designs on upping their petroleum production.
But the rub for these countries is that they are novices in the ways of unconventional oil and gas extraction and don’t have the equipment or the knowledge to do the work. However, they are willing to import what they don’t have, which presents Alberta service companies with some attractive business opportunities.
In fact, Alberta’s new Asian envoy, Gary Mar, told Alberta Oil in December that part of his job will be to increase the $6.5 billion worth of exports Alberta sent to the Asia-Pacific region in 2010. “We want to encourage services from Alberta going over there [to Asia],” Mar said. “For example, in India there is shale gas and coalbed methane. They are starting to import contemporary equipment but they don’t know how to use it. So there will be training opportunities and Alberta companies participating in that.”
Calgary-based Trican Well Service Ltd. is ahead of the curve in that regard. The drilling services firm has operations in the United States, Algeria, Kazakhstan, Australia and Russia.
Russia, which is producing an average of 10.3 million barrels of oil per day and reportedly has the world’s largest natural gas reserves at 1,680 trillion cubic feet, is one region were Trican is taking advantage of its unconventional expertise. The company, which has been operating in Russia since 2000, announced this winter that its 2012 revenue from activity in the former Soviet Union will increase approximately 10 per cent.
Russian customers are also increasingly interested in the work Alberta companies like Trican specialize in – horizontal completions and multi-stage fracturing. Trican CEO Dale Dusterhoft says the expected 10 per cent jump in revenue is “OK,” but as Russia looks to incorporate more state-of-the-art technology to keep the petrodollars flowing, the market could grow quickly.
“It’s the third-largest pressure pumping market in the world,” Dusterhoft says. “We’ll let the business grow there as big as it wants to.”